Lump Sum Orders in Divorce: What They Are & How They Work

What is a lump sum order?

A lump sum order is a financial order made by the court during divorce proceedings, requiring one party to pay a fixed amount of money to the other. It can be paid in one go or in instalments and is often used to achieve a clean break between former spouses. These orders are commonly made instead of spousal maintenance, or to make up for the other party retaining a larger share of certain assets or remaining in the marital home.

Lump sum orders are governed by Section 23(1)(c) of the Matrimonial Causes Act 1973.

When Are Lump Sum Orders Used?

Lump sum orders are typically used to:

• Equalise the division of assets
• Offset the transfer of property (e.g. one party keeps the family home and pays the other a lump sum)
• Replace ongoing spousal maintenance with a one-off payment
• Cover specific costs, such as legal fees or debts

They are especially common in cases where the court wants to avoid long-term financial ties between the parties.

How Are Lump Sum Orders Enforced?

If the paying party fails to comply, the recipient can apply to the court for enforcement. Methods include:

• Charging orders over property
• Third-party debt orders
• Attachment of earnings
• Bailiff action

The court takes non-payment seriously and may impose penalties or interest.

A series of lump sum payments or a lump sum payable by instalments?

Making a lump sum payment by instalment or as a series of payments may sound the same, but they are not interchangeable terms for the same payment method.

As per Hamilton v Hamilton [2013] EWCA Civ 13, an order for a series of lump sum payments and an order for a lump sum payable by instalments are two distinct types of orders. The label applied to this kind of order can have a significant effect, as an order for a lump sum by instalments can be varied, but an order for a single lump sum or a series of lump sum payments cannot. 

In the recent case BT v CU [2021], the court held that where an order has been made for a lump sum to be paid in instalments for the financial convenience of the payer, this will typically be an order for a lump sum by instalments. In contrast, if a party has been ordered to make various payments for different purposes, this will be an order for a series of lump sum payments.  

The benefit of a lump sum order - Achieving a clean break

The court will typically prefer to make an order for a lump sum payment rather than spousal maintenance, as it can help achieve a ‘clean break’ between the parties. The advantage of this is that it will cut any financial ties between the parties, meaning that neither party will owe any financial obligations to the other and both parties can move on with financial independence.  

Additionally, a lump sum payment can provide financial security to the party being paid. For such parties, it may be a relief to know that they do not have to wait for payment each month and potentially be concerned about enforcing payment at some point in the future. 

Capitalising spousal maintenance

Spousal maintenance may be capitalised into a lump sum payment. This means that future payments are rolled into a lump sum. In addition to the advantages of lump sum payments over spousal maintenance, the paying party will also have to consider any potential drawbacks. For example, spousal maintenance typically ceases once the party being paid remarries. If they remarry after receiving a capitalised lump sum payment, the paying party may end up paying more than they would have if they paid regular spousal maintenance instead. To identify how much should be paid to capitalise the spousal maintenance payments, the court uses the Duxbury calculation.  

If you are considering making or requesting a lump sum payment as part of your financial settlement, contact Vardags today for a free initial consultation with one of our expert divorce solicitors.  

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Frequently Asked Questions

Q: What is a lump sum order in divorce?

A: It’s a court order requiring one party to pay a fixed amount to the other, usually to settle financial claims.

Q: Can I get a lump sum instead of maintenance?

A: Yes. Courts often use lump sum orders to replace ongoing maintenance and achieve a clean break.

Q: What happens if my ex doesn’t pay the lump sum?

A: You can apply to the court for enforcement through various legal mechanisms.

Q: Can a lump sum order be changed later?

A: No. Once made, it is final and cannot be varied.

Q: Can lump sum orders be paid in instalments?

Yes. While the term “lump sum” suggests a single payment, the court can order that the amount be paid in instalments. However, the total amount is fixed.